Next Friday, the figures for housing prices in May will be released. In the previous month (April), housing prices increased by 0.4 percent in seasonally adjusted monthly terms (0.9 percent non-seasonally adjusted), according to HOX. In December, we wrote that we expected prices to stabilise heading into the new year, and even though it has been difficult to forecast developments in specific months, prices have overall and on average been roughly in line with our expectations at the start of the year. We have seen signs of a gradual stabilisation in prices and expectations for May are also for close to flat trends.

No rebound in sales activity expected

However, we have seen significant changes in sales activity over recent months. Activity has clearly been affected by the stricter amortisation requirements with high numbers of housing units for sale and a high number of completed sales in January and February, but lower activity in March and April. Overall, the housing market has become a little more sluggish following the amortisation requirements and compared with the previous year. In particular, turnover has decreased in the three counties of Stockholm, Örebro and Uppsala. We do not expect any large rebound in sales activity in May. As for supply, the number of housing advertisements on the home sales website Hemnet was 12 and 14 percent higher than a year ago for houses and tenant-owned apartments, respectively. Taken together, this is in line with April and supports our view that there will be no sharp increase in supply in the near term. Still, it is worth remembering that housing units in new construction are only to a small extent included in these figures, and data from the housing website Booli tell us that the number of units in new construction that are bookable is persistently rising. This will exert downward pressure on housing prices ahead. However, economic conditions will continue to be supportive, with a high employment ratio and rising incomes.